Federal regulators are forcing six Gulf Coast staffing agencies to pay nearly $3.5 million in back wages to 3,000 workers.
The U.S. Department of Labor Wage and Hour Division found that wages had been mislabeled as “per diem” payments for expenses they never incurred.
Per diem pay is a way for employers to reimburse workers for lodging, meals and other travel expenses incurred on behalf of their employer. The Labor Department said regular wages mislabeled as per diem cheat workers out of correct overtime wages.
The affected employees, which include welders, electricians, pipe fitters, and other craftspeople, worked on maritime vessels and other oil and gas industry projects at Masse Contracting, Permanent Workers, TREO Staffing, Flexicrew Staffing, Winston International and Government Support Services Inc.
The Labor Department said the investigation is part of an ongoing, multi-year initiative aimed at ending an illegal and alarming trend of employers labeling part of employee wages as per diem payments, often to avoid overtime, payroll taxes and other costs.
“Workers don’t often complain about receiving per diem pay in place of regular wages because they believe they make more money being paid this way,” Wage and House Division Administrator David Weil said in a news release. “The truth is these workers are losing out. They are not getting all of the short- and long-term benefits their employer owes them."